Solving the Brazilian Amazon land use &amp; land cover puzzle: four steps to ensuring conservation, justice, and sustainable development.

doi:10.21203/rs.3.rs-4366124/v1

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Solving the Brazilian Amazon land use & land cover puzzle: four steps to ensuring conservation, justice, and sustainable development.

https://doi.org/10.21203/rs.3.rs-4366124/v1

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Brazil emerged as an agricultural powerhouse in the last four decades, producing 33% of the world’s soybeans and 14% of its beef. Historically, much of that growth has come at the expense of its native ecosystems. A growing body of work suggests this paradigm is outdated and brings negative social and environmental outcomes. Here, we provide an integrated analysis of an alternate pathway to solve this puzzle based on a scenario of land-use allocation governance. We compare it with a business-as-usual scenario through the lens of cost, revenues, and impact. The path forward is based on four fronts that can reduce deforestation while increasing production and social well-being. First, allocate undesignated public forests as protected areas and improve the management of new and existing ones. This first strategy would generate a positive return, and foster recognition of human rights, cultural preservation, and improved livelihoods. Second, prevent legal deforestation on private lands and promote compliance with Brazil's Native Vegetation Protection Law (Brasil, 2012) through restoration, also generating positive returns and directing the region towards a zero-deforestation future. Third, promote sustainable intensification of medium and large farms. It would allow Brazil to achieve its agricultural production targets while freeing land up for soy expansion and restoration. Fourth, improve technical assistance and increase market access and income of smallholders while reducing deforestation pressure on family farms. Implementing these fronts requires a coordinated effort between public and private institutions. Still, it would reestablish Brazil`s global leadership in managing natural resources and mitigating climate change.

Earth and environmental sciences/Environmental sciences/Environmental impact

Scientific community and society/Agriculture

Earth and environmental sciences/Climate sciences/Climate change/Climate-change mitigation

Amazon

land tenure

deforestation

conservation

agriculture

climate change.

Clearing the Brazilian Amazon for agriculture has been touted as part of the solution to feeding a growing global population. However, conserving Amazon forests is critical to maintaining the climatic stability needed for that population to thrive. Solving this puzzle will require new strategies to address the perceived dichotomy between development and conservation, which ultimately threatens the environmental integrity of the region. Proposed pathways to end deforestation in the Brazilian Amazon – and its associated greenhouse gas (GHG) emissions – have generally been thought to be at odds with agricultural development and vice versa (Nepstad et al., 2009; Pinto et al., 2017). Recent studies (Marin et al., 2022; Stabile et al., 2023) have shown that it is possible to increase production while fostering conservation (Byerlee et al., 2014; Saraiva Farinha et al., 2019; Strassburg et al., 2014), but doing so would require coordinated public policies and market actions aligned to promote conservation, increase production and foster social wellbeing. This study recognizes that pursuing solutions to improve these co-benefits relies on solving Brazil's land-use allocation equation. To do so, we review different public and private policies that could be implemented and/or boosted, quantifying the potential economic costs and returns, and discuss the benefits and challenges ahead.

In the early 2000s, improvements in forest governance, monitoring, and enforcement, combined with economic incentives, allowed Brazil to become a global leader in agricultural production and environmental conservation (Nepstad et al., 2014). More recent increases in deforestation and forest fires (Rajão et al., 2020). have alerted international markets to the risks associated with commodities produced in the Brazilian Amazon. Since 2018, Brazil has dismantled national policies addressing climate change and forest conservation while redoubling investments in agricultural expansion to maintain its positive trade balance. However, after the 2019 presidential election, a new opportunity to put Brazil back on track, delivering agricultural products to meet increasing global demands while also delivering climate change mitigation outcomes to ensure a more sustainable development pathway. Market actors are waking up to the negative impacts of continued deforestation and logging for Brazilian exports, as evidenced by recent EU and UK commitments to limit imports linked to deforestation. The apparent disconnect between national agricultural development and conservation strategies creates attractive policy innovation opportunities. Instead, they have been used to drive a wedge between political factions that push seemingly irreconcilable policy agendas, ultimately weakening environmental legislation, hampering agricultural growth, and exacerbating climate risks that affect all sectors.

Here, we present the financial results of an integrated analysis that aims to balance these competing needs and identify potential pathways to help solve Brazil’s land-use allocation puzzle. In our previous paper, we developed the theory of the work needed in four different fronts to combine development with the end of deforestation (Stabile et al., 2020). Although we recognize the cost of reducing deforestation in the Amazon, we show that the returns from such an endeavor are net-positive from both economic and environmental perspectives. We focus on a pragmatic, stepwise approach that includes public and private lands conservation while addressing production for small, medium, and large farmers and ranchers. By implementing such a strategy, Brazil could simultaneously achieve its agricultural growth and forest conservation goals while increasing net revenue and reducing emissions well beyond current levels.

The results are presented below (Figure) and divided into spatially coherent area and by land tenure class. First, in Front 1 we consider the already protected areas as well as the undesignated public lands, where the focus is on improving governance and generating revenue. Secondly (Front 2), we consider mechanisms to foster conservation in private lands, generating value from standing forests. To meet market demands while reducing deforestation, we propose strategies for medium and large landowners (Front 3) and finally, in Front 4, we focus on income generation for smallholders and family farmers. Below, we describe the Business as Usual (BAU) and the Governance (GOV) scenarios for each of these four fronts.

2.1 Business as Usual scenario

In the Front 1, only the demand for private land was met; thus, income increases come solely from growing tourism in already existing CUs that allow it. On the other hand, costs remain the same since they result from maintaining existing CUs and ILs. The accumulated cost until 2030 was BRL 8.7 billion and the accumulated revenue was BRL 18 billion, with a net income of 9.3 billion (Fig. 1). In this scenario, no undesignated lands were allocated, maintaining the current scenario of low governance in undesignated lands, which encourages land grabbing and intensifies land conflicts.

For the Front 2, we assumed that only 15.8% of the required areas would be restored. This means that only lands with approved CARs that were enrolled in PRA would begin the restoration process. An annual cost of BRL 0.01 billion would be allocated to applying infraction notices for non-compliant lands through 2030. To solve land-tenure conflicts, eligible establishments would receive compensation for moving out of CUs. The accumulated cost was estimated at BRL 12.6 B (BRL 12.3 B from restoration, BRL 0.1 B from implementation of Brazil's Native Vegetation Protection Law, and BRL 0.2 Bi from infraction notices). The accumulated revenue until 2030 amounted to BRL 2.3 billion (BRL 1.6 Bi from restoration and BRL 0.7 for land use compensations). Adding the BRL 38.8 Bi collected between 2031–2059 would bring the total revenue to BRL 41.1 and the net revenue to BRL 28.5 Bi (Fig. 1). By 2030, conflicts over land rights are imminent and would impact Front 1.

In the front 3, the pasture extension in medium and large private land is estimated to have increased by 8%, from 34.4 Mha in 2018 to 37 Mha in 2030, requiring the clearing of new areas. Productivity was calculated by dividing annual production by grazing area, going from 41 Kg × ha^− 1 to 46 Kg × ha^− 1. As for soy, it was considered a 2.9% increase in production to meet demand, going from 39.5 Mton in 2018 to 55.6 Mton in 2030. There was also a yearly area increase of 2.3%, from 11.6 Mha in 2018 (MapBiomas, 2020) to 15.2 Mha in 2030. This increase in 31% of land requires new areas to be converted. In 2030, medium and large farms in Amazon are expected to be producing 1.7 Mton of beef, totaling BRL 20.1 B, and 55.6 Mton of soybean, resulting in BRL 67.6 B. The difference in the scenarios is in the cost to achieve this yield. In the BAU, extensive cattle ranching and agriculture require additional costs related to converting new areas. Until 2030, the accumulated cost for soy and meat was BRL 933 B and an accumulated revenue of BRL 968 B, resulting in a net of BRL 35 B. Land expansion can be expected to reinforce existing patterns of land conflicts and generate new ones, also culminating in losing public land to grabbers. It is also likely that there will be continuous loss of ecosystem services and propagation of large-scale wildfires.

Front 4, assumed the current technical guidance coverage (9%) and the current guidance model applied by INCRA would remain until 2030. Thus, no increase in income is foreseen, remaining the same revenue which that was observed in 2018. Until 2030, the accumulated cost was BRL 162 B and an accumulated revenue of BRL 218 B, thus resulting in a net of BRL 56 B. In this scenario, we considered no expansion or reduction of the technical guidance, so there would be no increase in income.

2.2 Governance scenario

In the front 1, All undesignated public areas are designated as protected areas in the governance scenario. For Indigenous territories, we assumed that each of the five steps to fulfill legal requirements to recognize a territory would take one year. Thus, 10.3 Mha would be fully recognized within five years. Considering a pace of 47% of the remaining undesignated areas would be annually designated as CUs in eight years (Nepstad et al., 2014). Just as in BAU, expected growing tourism increases the income of sustainable use CUs. Still, this scenario shows an additional revenue coming from new PAs, as well as additional costs for creating and consolidating them. The cost will vary according to the CU type, based on the level of complexity in terms of the necessary legal instruments or policy pressure to resolve potential land conflicts. Expenses associated with land regularization and inspection were also accounted for.

In the GOV scenario the accumulated cost was BRL 11.8 billion, and accumulated revenue was BRL 23.1 billion, with a net income of BRL 11.3 billion. In addition to the economic impacts, this scenario yields positive returns through the creation of 209 CUs, the legal recognition of 57 ILs, the clarifying land tenure of 0.2 Mha (via the CAR registry), the generation of green jobs, and open terrain for territorial development.

For front 2, Brazil's Native Vegetation Protection Law would be fully implemented, costing BRL 0.7 billion over 12 years. In this case, costs related to infraction notices were excluded, given that all required restoration will be completed. The implementation of ERQ would allow compensation between private lands. PES (based on the land opportunity cost) schemes would be in place to compensate landowners not participating in the ERQ market who have conserved native vegetation above and beyond the legally required limit. In this scenario, the accumulated cost was BRL 78.4 B (BRL 77.7 B from restoration and BRL 0.7 B from implementation of Brazil's Native Vegetation Protection Law). The accumulated revenue through 2030 amounted to BRL 34.2 B (BRL 10.4 B from restoration and BRL 23.8 from PES). Adding BRL 244.8 B collected from 2031–2059, the total revenue becomes BRL 279 B, and the net revenue BRL 180.5 B (Fig. 1).

In the Front 3, some establishments invested in intensifying production, increasing productivity, going from 46 Kg × ha^− 1 to 120 Kg × ha^− 1 on average in these regions. This investment shows up as a transition cost, BRL 627.00. Beef and soy production is expected to be the same in both scenarios − 1.7 Mton of beef and 55.6 Mton of soybean, resulting in BRL 67.6 B input. In the GOV scenario, however, it is achieved through intensification. In accumulated values from 2018 to 2030, the cost was BRL 917 B, while the revenue was BRL 968 B, resulting in a net income of BRL 51 B. In addition to the increase in profit, there would be zero deforestation, and 7.6 Mha of beef cattle pastures would average 120 kg/ha productivity.

In the front 4, the governance scenario assumed farmers would gradually receive more assistance moving towards the PAS model during the first five years. By 2030, 100% of farmers will receive PAS-like technical guidance. Revenue was estimates according to PAS effect. It shifts from a BRL 1,803 monthly family income in 2018 to BRL 2,396 in 2030, following the gradual increase in the rate of establishments receiving guidance. The estimated accumulated cost from 2018 to 2030 was BRL 200 B, while the accumulated revenue was BRL 319 B, resulting in a positive net return of BRL 119 B. In this scenario, 100% of agricultural establishments receive technical guidance (PAS Model) until 2030, inducing a 33% increase in income. Unlocking these benefits would require new investments of BRL 30 B until 2030. The return on that investment could be as high as BRL 100 B in net revenue to the private sector, smallholders, and the government, while substantially reducing deforestation in the Brazilian Amazon. Adding restoration would require an additional BRL 77 B, with a potential return of BRL 200 B over the next 30 years.

Brazil has emerged as a global agricultural powerhouse in the last four decades. It achieved this status largely by converting 65 Mha of native vegetation in the Brazilian Legal Amazon (MapBiomas, 2021). As of 2021, Brazil produced 33% of the world’s soybeans and 14% of its beef (FAO, 2021a, 2021b). The recent boom in agricultural production may create social benefits such as increasing income or improved access to schools and healthcare (Richards et al., 2015), but that is not always the case (Rodrigues et al., 2009). It has often contributed to income inequality, land concentration, rural violence and land grabbing, environmental degradation, and regional and global climate changes (Alston et al., 2000; Strassburg et al., 2014).

Although Brazil has begun to recognize that it cannot continue to sacrifice its natural environment to satisfy its goals of economic and agricultural growth (Pinto et al., 2017; Strassburg et al., 2014), it still lacks a clear path forward to harmonize production, environmental protection, conservation, and forest restoration. Recent national projections and commitments illustrate this lack of policy coordination. By 2030, the Ministry of Agriculture and Food Supply (MAPA) projects an increase in beef and soy production (of ~ 16% and ~ 30%, respectively) through expansion and intensification (Brasil and Secretaria de Política Agrícola, 2020). At the same time, Brazil and several subnational (state or municipal) governments have set conservation policies that include aggressive goals for forest restoration (12 Mha), recovering 15 Mha of degraded pasture lands, and ending illegal deforestation (Brasil, 2017; Mato Grosso, 2016). For instance, Brazil’s Nationally Determined Contribution aims to mitigate climate changes by reducing annual emissions by 50% until 2030 (Brazil, 2022). The greatest part of that commitment would be met by ending illegal deforestation in the Amazon, but there is no clear, long-term national strategy to reconcile these competing goals.

Brazil’s current strategies and investment approaches – the Business as Usual (BAU) scenario – may achieve strong agricultural output by 2030, at the expense of conservation goals. Over the last several decades, substantial efforts have been made to increase productivity in agriculture and cattle ranching (Hampf et al., 2020) as a way to avoid deforestation and mitigate climate change (Strassburg et al., 2014). Nevertheless, significant deforestation continues in the Amazon forest biome today, increasing from 4,571 km² in 2012 to 13,235 km² in 2021 (INPE, 2021). Along with a lack of investment in expanding protected areas and avoiding (legal and illegal) deforestation on private lands, this will keep Brazil from meeting its NDC goals, established at COP 21 (and revised in 2022 (Brazil, 2022), threatening climate change mitigation. Moreover, focusing on agricultural growth to exclude conservation is risky since native vegetation plays a critical role in regulating regional climate (Nobre et al., 1991; Shukla et al., 1990; Silvério et al., 2015). A growing body of evidence suggests that deforestation strongly affects local climate (Rattis et al., 2021; Lawrence and Vandecar, 2014; Hampf et al., 2020) that will negatively impact agricultural yields (Hampf et al., 2020; Rattis et al., 2021). Climate regulation by native vegetation is thus key to the long-term sustainability of agricultural production, which is highly dependent on predictable rainfall (Coe et al., 2017; Leite-Filho et al., 2021).

3.1 New path towards governance in land-use allocation.

For the private sector, the biggest cost associated with conserving forests is compliance with Brazil's Native Vegetation Protection Law (Brasil, 2012), which requires restoring illegally cleared landscape features protected by law (APPs and LRs). Public sector conservation costs include monitoring and enforcement on private properties; creating and managing public protected areas (Medeiros and Young, 2011); and delivering technical assistance to smallholders (Bragança et al., 2022). Our results show these costs may also hold essential opportunities and income generation potential.

Brazil has significant strategic investments that could help foster forest conservation and increase agricultural productivity while stimulating an emerging market for conservation and GHG reductions. Through coordinated investments in the following four sectors (Stabile et al., 2020), Brazil could generate substantial revenue and chart a more sustainable pathway for the Amazon: (i) designation of public forests as protected areas and improve the management of existing ones; (ii) avoid legal deforestation on private properties and promote compliance with Brazil's Native Vegetation Protection Law through restoration; (iii) promote sustainable and targeted intensification on medium and large farms; and (iv) provide technical assistance to increase income and reduce deforestation on smallholder farms (Fig. 1).

3.2 Designation of public forests as protected areas and improve the management of existing ones.

There are currently about 72 Mha of undesignated public areas in the Amazon – defined as state or federal lands that have yet to be allocated to a specific use (Azevedo-Ramos et al., 2020; Azevedo-Ramos and Moutinho, 2018). Of these, 49.8 Mha (69%) are public forests that must be designated for specific uses by law (Brasil, 2006). Another 22.7 Mha (31%) are public lands (not yet designated) also under threat. This unclear tenure status confers a high risk of illegal deforestation, even though they cannot be designated for private use (Brown et al., 2016). In 2019 and 2020, 44% of Amazon deforestation detected by PRODES occurred in public forests and lands. Two-thirds of this deforestation occurred in Undesignated Public Forests (Alencar et al., 2020; Salomão et al., 2021).

Since protected areas have been effective tools for deterring deforestation in the Brazilian Amazon (Walker et al., 2020), designating these forests as protected areas is a cost-effective strategy to reduce deforestation pressure and associated carbon emissions (Kruid et al., 2021), while limiting the market for land speculation in these undesignated lands (Azevedo-Ramos and Moutinho, 2018; Miranda et al., 2019; Moutinho et al., 2016; Soares-Filho et al., 2010). By designating public forests and limiting the supply of “cheap land”, associated with more effective command and control/governance and market actions that are sensitive to illegal production, there will be a shift towards increasing productivity in consolidated areas. Land grabbing and deforestation will be minimized while preserving ecosystem services in the region. The creation of new protected areas and environmentally distinguished settlements (Brasil, 2006) will also be adapted to the local need -- i.e., it will be “soft” when in remote areas and “strong” when closer to roads and at higher risk of deforestation (Alencar et al., 2020, p. 2; Nepstad et al., 2001; Silvestrini et al., 2011).

At the same time, many existing Conservation Units, and Indigenous Territories (PAs) need better management and governance. Deforestation in these areas accounted for 11% of total deforestation in the Amazon in 2019 (Alencar et al., 2020). Forest degradation due to natural and anthropogenic disturbances is becoming increasingly common (Walker et al., 2020). In our work, we account for the cost of continuous management to strengthen these areas' governance and implementation status.

Our results suggest that improving governance in existing PAs and speeding up land designation after 2019 (assuming all are designated with adequate governance by 2026) would cost BRL $3 billion by 2030. However, the additional revenues from forest concessions, extraction of non-timber forest products (NTFPs), and ecotourism (visitation impacts on local economies) would add up to BRL 5 billion by 2030. This investment would avoid ~ 852 km²yr^− 1 of deforestation annually.

3.3 Avoid legal deforestation on private properties and promote restoration.

There are 14.1 Mha of native vegetation on private properties that could be deforested legally, according to Brazil's Native Vegetation Protection Law (Brasil, 2012). The deforestation of these areas would likely push the Amazon past its tipping point (Banerjee et al., 2021; Sampaio et al., 2007), causing irreversible changes to the climate system and further increasing carbon emissions to the atmosphere. At the same time, an estimated forest deficit of 13.4 Mha of areas needs to be compensated or restored. We propose that landowners participate in one of two compensation mechanisms to avoid legal deforestation.

Without additional economic incentives, the remaining 10 Mha of forest surplus would be at risk of being legally deforested. Avoiding the conversion of these areas would depend on the creation of private or public compensation programs, including Reducing Emissions from Deforestation and Forest Degradation (REDD+) (Angelsen et al., 2012); payments for ecosystem services (Börner et al., 2017; Stabile et al., 2022); or more innovative approaches that use the carbon stored in these areas for offset markets (IPAM, 2014; Stabile et al., 2022). Investments in compensation programs to conserve these areas could come from the private sector, particularly actors committed to zero deforestation commodities or those from emerging carbon markets, as regulated during COP26 in Glasgow. These investments would effectively put a value on standing forests (or other native vegetation), while avoiding potential deforestation and its associated emissions. Such mechanisms have not been tested at scale (Engel et al., 2015), but based on current research, we estimate an annual opportunity cost of BRL 3.7 billion to preserve these forests (Soares-Filho et al., 2016), with a total cumulative cost of BRL 23.8 billion by 2030, given the time to reach everyone.

Areas deforested beyond the legal limit after 2008 do not qualify for the CRA compensation mechanism and need to be restored (Brasil, 2012). In the governance scenario, these 7.1 M ha would be restored considering the PLANAVEG protocol, with a total estimated cost of BRL 77.7 billion from 2019–2030, BRL 10.4 billion in revenue over the same period, and BRL 244.8 billion of potential revenue until 2060 solely from sales of wood and NTFPs derived from integrated production systems like agroforestry and sustainable forest management. These systems have a great potential to reconcile agricultural production with environmental legislation, increasing yield and farm income while also providing ecosystem services (Coelho, 2017; Gori Maia et al., 2021; Nair, 2011). This scenario would also avoid legal deforestation and facilitate compliance, avoiding ~ 1,200 km² of deforestation annually.

3.4 Promote sustainable intensification on medium and large farms.

Global demand for food will increase by 70% by 2050 due to increased population and income (FAO, 2018), and Brazil is a key player in global food security and conservation. Despite that, deforestation on medium and large private properties represented 23% of the total deforestation in 2019 (Alencar et al., 2020). However, considering that deforestation in public PAs is often converted to agricultural purposes (Salomão et al., 2021), agriculture and ranching remain the main proximate contributors to deforestation (Pendrill et al., 2022).

Meeting MAPA production targets (Brasil and Secretaria de Política Agrícola, 2020) through expansion into new areas could require as much as five Mha of additional deforestation despite recent productivity improvements (Caviglia-Harris, 2018; Strassburg et al., 2014). Intensification of cattle ranching has been cited as a potential strategy to reduce this demand for new deforestation for pasture and agriculture (Barretto et al., 2013; Cortner et al., 2019; Strassburg et al., 2014). Our approach is to prioritize areas suitable for intensification and propose that both the public and private sectors target actions to speed up sustainable intensification.

Increasing pasture productivity from 41kg ha^− 1yr^− 1 to 120kg ha^− 1yr^− 1 on 9 Mha of existing rangelands would allow Brazil to meet MAPA production targets (Brasil and Secretaria de Política Agrícola, 2020), freeing up lands to accommodate restoration of native vegetation deficits (9 Mha, front 2) while also allowing soy expansion to occur in the existing 3.6 Mha of pasturelands. This would strengthen Brazil’s role in the global food supply chain, while fostering compliance with existing legislation and reestablishing its leading position in conservation. Assuming profit margins increase with yield, we estimate that targeted intensification will have a higher return than under the BAU scenario during the study period (SM2). It would also avoid 56,000 km² of deforestation and associated emissions; contribute to compliance with Brazil's Native Vegetation Protection Law; and accommodate deforestation-free production in the Brazilian Amazon. This intensification would cost about US$6 billion but would save US$2.3 billion per year on decreasing operational costs.

3.5 Provide technical assistance to increase income and reduce deforestation on smallholder farms.

Family farming, on smallholder properties and within rural agrarian reform settlements, occupies about 71 Mha of the Amazon, an area 10% larger than France. These areas are home to 776 thousand families (IBGE, 2017) and an estimated population of more than 3 million people. Production and development in these smallholder properties is challenging (Oliveira et al., 2019), but is critical to meet conservation goals and improve livelihoods. Many settlers were sent to the Amazon to occupy such settlements in the 1960s and 1970s, but faced a grim reality with a lack of infrastructure, education, health, and market access (Guedes et al., 2014). Many have sold their lands and moved to the city to seek new opportunities, but unskilled labor generally struggles to find adequate, secure jobs.

It is critical to create conditions that enable production in these areas to thrive, helping connections to markets and allowing for better conditions in settlements, improving livelihoods. High deforestation rates on these properties stem from the lack of institutional support, particularly concerning technical assistance, access to technology, and the development of market access for agricultural or forest products (Alencar et al., 2022, 2016; Godar et al., 2012; Souza et al., 2022). A small fraction (2–5%) of these rural settlements is responsible for ~ 25% of deforestation (Assis et al., 2019; Godar et al., 2012). Given the amount of land and current economic conditions, there is a very high risk of deforestation in settlements which tends to increase over time (Alencar et al., 2016).

Getting there. Curbing deforestation in the Brazilian Amazon is not only possible but could be quite profitable. Getting there will take coordinated efforts to limit the land available for land grabbing and expansion of the agricultural frontier, together with targeted investments to preserve at-risk native vegetation on private properties and increase productivity on farms and ranches of all sizes. This would occur while contributing to climate change mitigation and producing enough food to meet projected demands, contributing to global food security. Careful investments in the strategies described above could yield environmental and economic gains for Brazil and help mitigate global climate change in the region.

We estimate the need for about BRL 100 billion by 2030 to implement the proposed changes in these four sectors. The return on that investment would be a total net revenue of BRL 110 billion during the same period and BRL 200 billion for the next 30 years; avoided deforestation of more than 80 thousand km² (⅔ of the BAU) in the period, which amounts to avoided emissions of 2.9 GtCO₂., assuming a conservative carbon stock of 100tC ha^− 1 (Ometto et al., 2023). These estimations are likely conservative, given that it does not include the induced benefits associated with job creation, increased income further down the supply chain, or environmental services provided by forests. We purposefully do not include any potential revenue from carbon in our calculations to show that the proposed initiative here would be profitable anyhow.

The designation of public lands would help Brazil solve a long-term and hard-fought land tenure issue, fostering productivity gains in the rural sector and compliance with Brazil's Native Vegetation Protection Law, allowing Brazil to realize its full potential for agricultural production and conservation. By creating new and maintaining existing PAs, we prevent negative externalities and enable conservation and its interdependences with the other 3 fronts. The investments in compliance of Brazil's Native Vegetation Protection Law, with restoration (particularly in productive restoration), establishing a CRA market, and providing incentives to avoid legal deforestation would have a long-term return greater than the other fronts as it mobilizes investments and trade in the region. Production intensification will allow for the same output using fewer resources with a positive balance. That would also contribute to the income of medium and large farmers engaged in beef and soy production detached from deforestation. Lastly, investments in universal technical assistance can diversify production in smallholder farms, where ranching can coexist with other activities such as açaí, cocoa, fruit, and vegetable production. That would be leveraged by infrastructure investments, creating a thriving and dynamic rural environment. Implementing such strategies would require coordination between federal and state government and private sector initiatives to help us put all the pieces of the puzzle in place.

Funding the future. Several potential financing sources already exist that make achieving the BRL 100 billion investment over the 12 years a real possibility. If focused on the common goals of increasing productivity, social wellbeing, and conservation, these funds would be sufficient to meet required investments. For example, Brazil’s Agricultural Finance Plan for 2021/2022 has BRL 251 billion available for rural credit, including incentives for pasture recovery, but only a small fraction (5% in 2020) is used to promote best practices. Attaching favorable terms to loans that support intensification and avoid deforestation could provide much of the funding we outline for the intensification program. Private sector investments, such as loans beyond the Plano Safra, could have attached intensification and conservation goals aligned with commitments from market actors for deforestation-free sourcing (CGF, 2019; TFA 2020, 2019; West and Fearnside, 2021).

By adjusting to existing structures, such as public state technical assistance (EMATER and EMPAER) and credit lines designed for smallholders (PRONAF), it would be possible to enhance smallholder production while reducing the demand for new land. Credit disbursed to smallholder farmers should be linked to technical assistance (Souza et al., 2022) and diversification as a strategy to mitigate risks and, when needed, also foster the restoration of areas. Infrastructure projects in the Amazon generate revenues of environmental compensation, which could be used to fund infrastructure improvements to facilitate access to markets, communication, health, and education in rural settlements, as well as to provide resources for implementing and maintaining new and existing protected areas (Bandura et al., 2020a, b). Protected areas would generate income from extractive supply chains, non-timber forest products, and public use, notably visitation and its effects on the local economies.

Brazil’s tax structure incentivizes commodity production and exportation but provides little incentive for sustainable production systems or value-added products. Exports of raw materials, such as soy, are responsible for Brazil’s positive trade balance but are tax-exempt, not generating income for the government. It is a lost opportunity for value-adding in the country, which could generate income, jobs, tax, and productivity increases. Processing and exporting manufactured goods would generate more local jobs, fostering the infrastructure investments needed to connect local production (non-commodity) to the global market. A near-term strategy to address this imbalance would be to create benefits for producers with forest surpluses and penalize those out of compliance with the law (Stabile et al., 2022).

Moreover, existing supply chain agreements such as the Soy and Beef Moratoria could provide additional incentives to promote intelligent agricultural intensification and avoid deforestation on private properties, while meeting the targets of sustainable production and not jeopardizing food security (Guimarães et al., 2023; Reis et al., 2020).

International financing programs for avoided deforestation, such as the Green Climate Fund, the LEAF Initiative, and International Civil Aviation Organization, could also be harnessed to provide payments for avoiding legal deforestation, jurisdictional REDD programs, and facilitate the trading of forest surplus certificates. Lastly, innovative arrangements involving public-private partnerships could invest in technical assistance to increase food security and income, boosting the local economy.

The conventional argument has been that increasing production while conserving forests and reducing CO₂ emissions is simply too expensive (negative net revenue) to be practical (Pinto et al., 2017). The recent outbreak of the COVID pandemic has shown how reliant the world is on food and feed production from Brazil, with increased exports in the last year. We need to ensure that such production is sustainable in the long run and that climate change will not risk local and global food security. Our results reinforce that political engagement with participation from the private sector can put the pieces of the puzzle into place, reconciling production, and conservation. Addressing the four fronts at the same time will move Brazil in the right direction. Now is the time to set Brazil on a path to economic growth and environmental conservation. Doing so would not only generate revenue but also have global repercussions. With over 10% of global food production, Brazil can help feed the world while providing much-needed leadership in meeting or exceeding its targets to reduce GHG emissions and conserve functioning ecosystems.

The study area covers all nine Brazilian Legal Amazon states, encompassing the entire Brazilian Amazon and part of the Cerrado and Pantanal biomes. According to TerraBrasilis (Assis et al., 2019), from 2012 to 2022, the Brazilian Legal Amazon experienced an increase in deforestation by 187%, peaking in 2022 with 1,3 Mha deforested. Such increase in deforestation was also observed in Conservation Units (CU) and Indigenous Land (IL), representing a 306% and 107% increase in the deforested area, respectively, for the same period. The states with the highest deforestation were Pará (43% of the total), Amazonas (18%), and Mato Grosso (16%). While deforestation in Mato Grosso was primarily focused in rural properties, Pará and Amazonas were affected mainly by deforestation in undesignated public forests and rural settlements (Alencar et al., 2022).

Such trends demonstrate that strategies to reduce deforestation should be intersectoral, coping with different land-use allocations already in place or planned. Solving this equation involves working simultaneously along four fronts identified by Stabile et al. (2020): (1) eliminating land grabbing and land speculation; (2) reducing legal deforestation on private lands; (3) incentivizing intensification of large-scale agriculture; and (4) fostering technical assistance to improve the livelihoods of smallholder farmers. We built a scenario in which these four lines of actions are executed (Scenario Equation). We compared it with the business-as-usual scenario (Scenario BAU) in terms of costs and revenues. Figure 1 presents the overall concept and analysis flux. Below we review each of the four fronts in detail, including the data analyzed and the associated costs and revenues projections. All values were price-adjusted using the Amplified Consumer Price Index (IPCA) up through the end of 2019.

5.1 Create and maintain Protected Areas (PA)

The first front of the equation involves two strategies: (a) designated public forests to be protected and (b) avoid deforestation in protected areas by ensuring their proper functioning (Stabile et al., 2020; Young and Medeiros, 2018). Nowadays 49.8 Mha of the Undesignated Public Lands in the Brazilian Legal Amazon is covered by forests and part of the National Registry of Public Forests (CNFP). The remaining 22.8 Mha (72.6 Mha) has been partially deforested and is not in the CNFP (Azevedo-Ramos et al., 2020). These areas have experienced high deforestation rates, with a cumulative loss of 2.6 Mha from 1997–2018. This process is closely associated with land grabbing and speculation, whereby many public land parcels are eventually converted to private uses (Moutinho and Azevedo-Ramos, 2023). To remedy this situation, the designation of public lands reached its peak from 2002–2007 (Nepstad et al., 2014).

Further expansion of these areas could help decrease local and macro-scale uncertainties. It can also increase income and provide better living conditions for local communities, often displaced during land-grabbing. Ultimately this approach could help shift the regional economy to a more sustainable path with legal timber, extractive products, and ecosystem services.

Supplementary material A describes the data and projections used to estimate costs and revenues. The estimates incorporate legislation and expenses concerning the designation of public land to be protected (as either UC type I, UC type II, IL), consolidation and maintenance of existing or future ones, projections of tourism activities and extraction of non-timber products.

5.2 Environmental compliance and incentives to avoid deforestation.

The second front focuses on creating incentives for medium and large rural properties in the Legal Amazon to (i) avoid legal conversion of native vegetation and (ii) foster restoration for those in deficit. Currently, 14.1 Mha of natural vegetation can still be legally suppressed as they are in private areas and are not a component of features protected by legislation such as Areas of Permanent Preservation - APP and Legal Reserves - LR. The conservation of these areas and fostering restoration are essential to ensure the provision of ecosystem services, contributing to climate change and biodiversity loss mitigation. Environmental compliance through the restoration of APP and LR has the potential to recover 13.4 Mha of native vegetation inside APPs, and RL lost for illegal degradation in the last decades.

Supplementary material B brings a description of the data and projections used to estimate costs and revenues. The estimates incorporate legislation (mainly but not restricted to Federal Law 12.651/2012), restoration strategies (PlanaVeg and others), implementation of Environmental Reserve Quotas (ERQs), and Payment for Ecosystem Services (PES).

5.3 Production intensification to meet future demand.

The third front focuses on increasing productivity in medium and large rural properties without further native deforestation conversion. Nowadays medium and large farms represent both an important deforestation driver (Alencar et al., 2022) and an essential part of the Brazilian economy. According to CEPEA and CNA (CNA and CEPEA, 2022), 27.4% of Brazilian GDP was related to agribusiness in 2019. Decoupling deforestation from crop and beef production was a key element to bring Brazil to a sustainable development path in the past (Moutinho et al., 2016), and it remains a challenge. Some states have already proved that production and conservation can be reconciled, such as Mato Grosso between 2009 and 2018 (IBGE, 2019, 2022a; INPE, 2021). We highlight strategies that enable meeting national and international demands for the two main agribusiness products in the Legal Amazon - beef and soy (Brasil and Secretaria de Política Agrícola, 2020) without expanding it over native vegetation.

We use two premises: (i) that implementing actions in the first front would limit the availability of “cheap land”. Thus, intensification would be more profitable than expanding even on the 63.7 Mha of degraded land across Brazil (Arantes et al., 2018); and (ii) technology-driven intensification can avoid incentives for deforestation associated with market drivers or closeness to the agriculture frontier in consolidated farms (Byerlee et al., 2014; Marin et al., 2022). This market shift would represent a way back to an increase in production output decoupled from deforestation. Here, we suggest that the intensification benefits, such as increased productivity and profitability, outweigh its costs. Intensifying less than 10 Mha (28% of 2018 area) of pastureland from the current 46 kg × ha^− 1 to 120 kg × ha-1 can free up to 12.8 Mha and still meet the growing demand for beef. This decrease in pasture areas would allow zero deforestation in the beef and soy sector by leaving space for soy expansion and restoration of private lands degraded after 2008. In case of no additional effort for intensification, we estimate that the increased demand for beef and soy would lead to the deforestation of roughly 6 Mha from 2018 to 2030.

Supplementary material C describes the data and projections used to estimate costs to implement intensification and revenues. The estimates incorporate data and projections from IBGE, MAPA, and MapBiomas.

5.4 Fostering technical assistance to improve the livelihoods of smallholder farmers.

The fourth front focuses on small rural properties, may they be in rural settlements or not, to increase income and wellbeing while reducing deforestation pressure. Families running small rural properties currently occupy an area of 71 Mha in the Legal Amazon; where deforestation has increased significantly in the past years – from 169,000 ha in 2017/2018 to 281,800 ha in 2019/2020 (Alencar et al., 2022), reaching up to 28.79% of the total deforestation in the Amazon. Many commodity crops are not viable in small farms. When viable, it demands technology and investments to replace extensive traditional practices. Diversifying productions and gaining market access are key to increasing income (Erika de Paula Pedro Pinto, 2016; West and Fearnside, 2021). Technical Assistance and Rural Extension (TARE) can increase income and reduce deforestation pressure by bringing technology and investments in best practices. Unfortunately, less than 9% of smallholders located in the Brazilian Amazon have declared to receive technical assistance (IBGE, 2017).

The Amazon Sustainable Settlements Program (PAS) s shown a 40–90% increase in annual household income and a 24% reduction in the deforested area in four settlements in the Trans-Amazonian Highway region. These results were all based on the capacity of TARE improving productivity and decreasing deforestation incentives, indicating these results can be replicated on a larger scale (Ane Alencar and Maria Lucimar de Souza, 2021).

To implement technical assistance and rural extension, increasing smallholders wellbeing and decrease deforestation pressure, we have worked with data from CAR (SFB, 2020), IBGE (IBGE, 2017), PAS guidelines (Ane Alencar and Maria Lucimar de Souza, 2021; Erika de Paula Pedro Pinto, 2016) – all described in Supplementary material D in further detail.

Table 1

Summary of Business as Usual (BAU) and Governance scenarios, by front, status, and net-return.
	Scenario: Business as usual		Scenario: Governance
	Status in 2030	Net return	Status in 2030	Net return
Front 1.	72.6 Mha of undesignated areas 2.4 Mha of projected deforestation	BRL 9.3 billion	10.3 Mha new regulated Indigenous Territories 62 Mha new Conservation units 100% adequately managed	BRL 11.3 billion
Front 2.	No CRA or offset market 1.4 Mha of projected deforestation 1.4 Mha restored	BRL 28.5 billion	Effective market for CRAs and surplus No deforestation 9 Mha restored	BRL 180.5 billion
Front 3.	Production to meet demand. 5.6 Mha of deforestation Marginal productivity increases	BRL 34.6 billion	Production to meet demand. No conversion 9.6 Mha (28%) of pastures with improved productivity	BRL 51.5 billion
Front 4.	68 thousand families (8.8%) receiving technical assistance. 4.7 Mha of deforestation	BRL 56.3 billion	100% of families receiving technical assistance 31% increase in income -35% deforestation	BRL 118.4 billion

Acknowledgments

The authors would like to thank Sylvia Mitraud and Edivan Silva for sharing opinions with us in an early version of this document. This work was supported by XXX and XXX foundations for supporting IPAM’s work.

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Solving the Brazilian Amazon land use & land cover puzzle: four steps to ensuring conservation, justice, and sustainable development.

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Abstract

Figures

1 INTRODUCTION

2 RESULTS

2.1 Business as Usual scenario

2.2 Governance scenario

3 DISCUSSION

3.1 New path towards governance in land-use allocation.

3.2 Designation of public forests as protected areas and improve the management of existing ones.

3.3 Avoid legal deforestation on private properties and promote restoration.

3.4 Promote sustainable intensification on medium and large farms.

3.5 Provide technical assistance to increase income and reduce deforestation on smallholder farms.

4 CONCLUSIONS

5 METHODS

5.1 Create and maintain Protected Areas (PA)

5.2 Environmental compliance and incentives to avoid deforestation.

5.3 Production intensification to meet future demand.

5.4 Fostering technical assistance to improve the livelihoods of smallholder farmers.

Declarations

Acknowledgments

References

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